After several years, the Sultanate of Oman has achieved a surplus in its annual State budget, according to the final account data for the year 2022. Prior to this milestone, a deficit budget has been a dominant feature of Oman’s financial performance for several years, with the economy depending on financial flows from the oil and gas sectors over the past decades. The surplus in the 2022 budget amounted to about RO 1.144 billion, from a deficit of RO 1.223 billion in 2021.
The statement issued by the Ministry of Finance shows that Oman recorded actual revenues of RO 14.473 billion ($37.340 billion) in 2022, an increase of RO 3.278 billion over 2021.
The increase in revenues was achieved through three main items, which are oil revenues, that amounted to RO 7.6 billion, accounting for 52.5% of total revenues, followed by revenues from the gas sector of RO 3.5 billion, or 24.18% of the total, and finally other revenues, amounting to RO 3.2 billion, or 22.11% of the total. The average price of a barrel of Omani oil approved for the 2022 budget was around $50, but the actual price reached $94 from production, which rose to 1.060 million barrels per day. This helped reduce the external debt and fund the implementation of some scheduled projects.
As for actual spending, it amounted to RO 10.092 billion last year, with defence and security expenditures at RO 2.928 billion (29% of total public spending), while civil ministries’ expenditure amounted to RO 4.449 billion, or 44% of total expenditure. Debt serving for 2022 amounted to RO 1.076 billion, representing 10.7% of the total, which greatly affects the country's development issues, with the Sultanate seeking to reduce the effects of public debt.
Moody's credit rating agency indicates that Omani efforts have had a tangible impact in maximizing financial surpluses, and a decline of more than 15% of total debt in 2022, down from 68% in 2020 to 40% in 2022 as a percentage of GDP. The agency also recently raised Oman's credit rating from Ba3 to Ba2, while maintaining a positive outlook, as a result of its commitment to pay public debt dues, the decline in its burdens, and the improvement in its ability to meet these financial obligations.
Oman is witnessing these positive developments as a result of the tangible efforts made by the concerned institutions in improving the financial performance of government bodies, earmarking financial surpluses to reduce public debt, thereby helping improve and strengthen fiscal policy and the efficiency of financial governance. These measures have also helped bolster financial support for educational, health and social institutions, while enabling the provision of housing loans, developmental funding and other support.
The increase in the revenues of the Tax Authority sector and fees collected from companies and institutions, in addition to the revenues of the Oman Investment Authority, the revenues of the Royal Oman Police and the Ministry of Labour, revenues from value-added tax and customs tax, had a positive impact in enhancing the financial position of Oman during the past year.
Oman Observer is now on the WhatsApp channel. Click here
